Tuesday markets
It was another rally for the cattle complex as cash trade was $2-3 higher than Friday.
Live cattle were higher, with the December contract up 97 cents to $135.40 and the February contract higher 45 cents to $139.42.
“After digesting the Cattle on Feed report over the weekend, traders set their sights on the strong potential for higher cash this week,” Robin Schmahl, DTN contributing analyst, wrote in Early Word Livestock Comments. “Demand is solid and packers need to maintain brisk slaughter schedules. Packers did not throw out any bids yet this week, and probably will not either. The holiday-shortened week may have them stepping up to match the offers in order to accomplish business.”
Cash trade was moderate, with 10,352 head selling between $136-137. Dressed steers sold between $213-215, averaging $213.31. Negotiated cash trading was limited on light demand in all other major feeding regions. There were a few live purchases in the Southern Plains at $136.
On the formula side, 22,700 head averaging 879 lbs. sold for $213.44.
The national weekly direct beef type price distribution for the week of Nov. 15 to Nov. 22 was the following on a live basis:
• Negotiated purchases: $133.24.
• Formula net purchases: $133.40.
• Forward contract net purchases: $130.69.
• Negotiated grid net purchases: $132.28.
On a dressed basis:
• Negotiated purchases: $209.63.
• Formula net purchases: $211.13.
• Forward contract net purchases: $201.59.
• Negotiated grid net purchases: $206.50.
Slaughter for the day is expected to be 122,000 head, the same as last week. USDA’s Agricultural Marketing Service released the National Weekly Fed Cattle Comprehensive report, showing quality grading was down 0.7 percent to 80 percent, and dressed weights were up 2.8 lbs. to 892.1 lbs.
Boxed beef prices were lower on 193 loads; the Choice cutout was down 61 cents to $278.64, and the Select cutout was down $1.06 to $262.67.
USDA’s National Agricultural Statistics Service (NASS) released the October Cold Storage report, showing total red meat supplies in freezers were up 1 percent from the previous month but down 3 percent from last year. NASS stated beef supplies were 477.1 million lbs., up 9 percent from September but down 5 percent from October 2020.
Feeder cattle
Feeder cattle enjoyed a healthy rally, with the January contract up $2.67 to $164.37 and the March contract up $1.57 to $165.67. The CME Feeder Cattle Index was higher 64 cents to $156.29.
Corn contracts experienced modest gains, with the December contract up 3 cents to $5.80 and the March contract higher 4 cents to $5.88 a bushel.
“One may feel skeptical about the rally that’s igniting the feeder cattle complex, as some may worry it’s just a holiday fluke and the market really isn’t that robust,” ShayLe Stewart, DTN livestock analyst, wrote in the midday comments. “But when you look at the market from both a technical and fundamental stance, the support is fully there for the market to soar higher. Technically speaking, the market has all the upward potential it could ever dream of as resistance is far out and traders seem interested. And, fundamentally, with the mass liquidation that’s happened throughout the western U.S., feedlots and packers both know supplies of calves are going to be harder to come by in the years ahead.”
Nebraska: Tri-State Livestock in McCook sold 1,175 head on Monday. Compared to the previous auction, there was not enough trade for comparisons. However, the demand was good. Benchmark steers averaging 796 lbs. sold for $169.25.
New Mexico: Roswell Livestock in Roswell sold 1,725 head on Monday. Compared to the last auction, steer and heifer calves under 600 lbs. sold $2-6 higher, though quality was more attractive. Feeder steers over 600 lbs. sold $3 higher. Feeder heifers over 600 lbs. were steady to $2 higher. A group of steers averaging 719 lbs. sold between $136.50-140, averaging $137.88. — Charles Wallace, WLJ editor
